Oregon Could Lose $972 Million to Trump’s Tax Bill While the Wealthy Reap the Benefits
An analysis published in July projects that the recently approved federal tax changes in President Donald Trump’s signature legislation will result in a revenue loss of almost $1 billion to the state of Oregon over the next two years.
Trump’s Bill Could Cause Almost $1B In Lost Revenue In Oregon
A preliminary analysis issued by the nonpartisan Legislative Revenue Office (LRA) of the Oregon State Legislature projects a revenue loss of $972 million for 2025 to 2027 when budgeting for the effects that Trump’s bill will have on the state.
A report published by the Annenberg Public Policy Center at the University of Pennsylvania indicates that while the tax changes in the federal bill are expected to benefit taxpayers across every income group, they are likely to disproportionately favor wealthy Americans.
The LRA report indicates that over 100 provisions of the federal bill will affect Oregon’s tax system, as several federal tax changes flow down to the state. The most significant cuts, about $451 million in personal income tax revenue and $581 million in corporate taxes over the next two years, will have critical effects.
However, Oregonians and businesses operating in the state will save on their tax bills.
Lawmakers will also have fewer resources to draw from in the state’s general fund than budgeted for. The 2025-2027 state budget projected $37.3 billion in general fund spending.
The 2.6% anticipated revenue drive could make for difficult choices in the months ahead as the state is seeking ways to boost school funding and bolster its transportation network.
Aside from the next two years, Oregon will feel the effects of the bill on future revenue. A $159 million decline in revenue between 2027 and 2029 is projected in the report.
About $2.9 billion had been stashed away in Oregon’s two most significant reserve funds- the Rainy Day Fund and the Education Stability Fund, by the end of June, but accessing these reserves requires consensus among top lawmakers on where the money should be spent and a three-fifths majority vote in the Legislature.
Oregon’s income tax system is closely linked to the federal system, making it particularly vulnerable to federal tax cuts.
The state’s starting point to assess taxes due by individuals or businesses is their federal taxable income. State economists have said that Oregon lawmakers could decouple from the federal tax code to mitigate the immediate effects of the federal tax changes.
State economists are expected to present their quarterly revenue forecast on August 27 to the Legislature, which will include an updated analysis for lawmakers. However, it is anticipated that the full effect of Trump’s bill won’t be known for months or even years.